Cloud computing in India has evolved from a “nice to have”, to a viable alternative to traditional IT. In 2018, end user spending on public cloud Infrastructure as a Service (IaaS) and Software as a Service (SaaS) in India is set to reach $1 billion each. This is driven by three key factors.

First, a competitive vendor landscape and a rapidly evolving partner ecosystem. The presence of hyperscalers, such as Amazon Web Service and Microsoft Azure in addition to local service providers such as CtrlS, Netmagic solutions and Sify, is a key driver for adoption of cloud computing.

Second, large enterprises in India are increasingly moving towards a cloud first strategy. While CIOs are constantly evaluating the possibility of migrating existing applications to the cloud, most new business application requirements are being addressed by using public cloud platforms for both development and hosting.

Chief Information Officers (CIOs) will move from a single provider to a multi-cloud strategy, and they will also begin moving more complex workloads to the cloud.

Third, a rapidly developing start-up ecosystem. The last five years have witnessed an emergence of a large number of startups offering e-commerce products that serve the local market, and companies that offer products based on Internet of Things (IoT) and Artificial Intelligence (AI) which address a broad range of use cases. These startups often operate lean, mostly host applications that are developed and hosted in the public cloud, in an effort to minimize risks involved with capital investment.

In 2018, we expect cloud computing adoption to accelerate further. Cloud computing, due to its on-demand and elastic nature, as well its “pay per use” consumption model, is viewed as one of the key enablers for digital transformation. As enterprises in India embark on their digital business transformation journey, they will look to “fail fast”.

In 2018, Gartner also expects that Chief Information Officers (CIOs) will move from a single provider to a multi-cloud strategy, and they will also begin moving more complex workloads to the cloud. We will witness an acceleration in the adoption of public cloud, particularly for use cases such as test and development based on container technology on the cloud, big data analytics and messaging and collaboration. Furthermore, enterprises will execute a number of high-risk, high-reward projects based on IoT and AI technologies. Public cloud infrastructure and its overlying services will be leveraged to implement these projects.

While CIOs continue to identify and evaluate possible use cases for public cloud computing, they will need to transform the IT organization in order to address some fundamental challenges. A large number of public cloud projects today are executed by application teams outside the purview of traditional IT, often referred to as “shadow IT”. CIOs will be required to introduce enterprise-wide policies to ensure public cloud projects are executed and managed by internal IT teams.

As enterprises move to a hybrid IT environment, the location of application and underlying infrastructure becomes less relevant. IT teams must strive to meet service levels irrespective of application location and transform themselves into “service brokers”.

Another challenge, although temporary, is the learning curve involved in understanding the multitude of products and functionalities that the hyperscale cloud providers offer. Designing, implementing and managing systems in hyperscale public clouds require a new set of skills.

Cloud architects must also thoroughly understand the cost implications of their design, failing to do so will result in cloud deployments that will prove to be expensive. CIOs and IT leaders must understand that the OPEX-based consumption models offered by cloud providers differ significantly from traditional “CAPEX” based models that IT and procurement teams are used to, and then re-align accordingly.